# title
Quantification of risk cost associated with short-term warranty-based specifications for pavements

# abstract
To reduce overall costs and improve quality, many state highway agencies have begun investigating innovative contracting methods. One of the most important types of such innovative methods is warranty-based contracting. This method is tailored to shift performance-related risk from the agency to the contractor by means of warranty provision. Although the application of the warranty-based contracting method allows for a win-win situation in which agencies hedge the performance-related risk and contractors have more flexibility in design and construction process, there are many concerns about its implementation. One of the most important concerns is quantification of risk cost. A methodological framework was developed to quantify the risk cost, and decision-support models that can be used to analyze short-term performance warranties were formulated. The proposed methodology considers the characterization of the warranty system, the development of a structural reliability performance model based on the method of moments, and the formulation of two decision-support models: the risk cost model and the optimal warranty-based design model. To illustrate the methodology, the development of the proposed decision-support models is presented, along with the current AASHTO design method for flexible pavements, followed by a numerical example that demonstrates the results.

# authors[].organizations[].label
Texas A&M Engineering Experiment Station (TEES)